For Immediate Release
Chicago, IL – January 21, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Morgan Stanley (MS), Wells Fargo & Co. (WFC), Coach, Inc. (COH), US Bancorp (USB) and Supertex, Inc. (SUPX).
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Here are highlights from Wednesday’s Analyst Blog:
Morgan Stanley Underperforms
Morgan Stanley (MS) reported fourth-quarter 2009 net income of $413 million or 14 cents per share, compared to net income of $498 million or 48 cents per share in the prior quarter and net loss of $10.5 million or $10.92 per share a year ago. The results missed the Zacks Consensus Estimate of 36 cents per share. Morgan Stanley marked the second consecutive quarter of income this year.
Results were aided by robust underwriting revenues in the investment banking operation, resulting from higher levels of market activity, prime brokerage and wealth management business, which offset losses in fixed income sales and trading along with commodities and the negative impact of the improvement in Morgan Stanley’s debt-related credit spreads. These credit spreads reduced the quarter’s revenue by $0.6 billion and earnings per share by 27 cents.
Net revenues for the quarter were $6.8 billion, down 19% sequentially but up 153% year-over-year compared with negative revenue of $13.0 billion in the fourth quarter of 2008.
Wells Fargo Beats Estimates
Wells Fargo & Co.’s (WFC) fourth quarter 2009 net income applicable to common stock came in at $394 million or 8 cents per share, compared to a net loss of $3.02 billion or 84 cents in the prior-year quarter. Results were soundly ahead of the Zacks Consensus Estimate of break-even.
Results included $450 million in merger costs, a $261 million previously disclosed expense provision for an auction rate securities (ARS) settlement and $150 million employee benefit-related expenses for 401(k) profit-sharing contribution. Diluted earnings per share included 47 cents for TARP preferred stock dividends, including the deemed dividend upon redemption of TARP preferred stock.
During the quarter, Wells Fargo earned $22.7 billion of combined revenue, driven primarily by 16.0% year-over-year growth in legacy Wells Fargo revenue to $12.03 billion. While mortgage originations and servicing revenue remained high, total mortgage banking non-interest income contributed just 15.0% of the company’s consolidated revenue for the quarter.
Coach Tops Zacks Consensus
Amid a weak retail environment, Coach, Inc. (COH), the designer and marketer of fine accessories and gifts, recently reported second-quarter 2010 results that topped Zacks’ expectations.
Coach’s quarterly earnings of 75 cents a share outdid the Zacks Consensus Estimate of 72 cents, and jumped 11.9% from 67 cents delivered in the prior-year quarter. Coach was buoyed by positive comparable-store sales achieved at North American stores, competitive pricing and innovative products, which lured customers in the holiday season.
Total net sales climbed 10.9% year-on-year to $1,065 million, driven by a 16% gain achieved in the North America retail business and strong growth in the China business with a double-digit rate increase in comparable-store sales. Comps at North American stores rose 3.2%, the first increase in over a year.
US Bancorp Outdoes Expectations
US Bancorp (USB) has reported fourth quarter earnings of $602 million or 30 cents per share, 2 cents ahead of the Zacks Consensus Estimate. Results were driven by higher revenue. Results were flat compared to the prior quarter and up from the year-ago quarter when the company had earned $330 million or 15 cents.
However, credit losses and non-performing assets continued to trend higher in this quarter, reflecting continued stress in the commercial, commercial real estate, residential real estate and consumer loan portfolios. However, we note that the rate of deterioration has somewhat moderated in the quarter.
Quarterly results were impacted by a $278 million of provision for credit losses in excess of net charge-offs and net securities losses of $158 million. These items reduced earnings by 18 cents per share.
For the full year 2009, US Bancorp reported a net income of $2.2 billion, or 97 cents per share, compared to net income of $2.9 billion or $1.61 per share in 2008.
Supertex Beats Estimates
Supertex, Inc. (SUPX) reported net sales of $16.7 million, up 5% sequentially but down 5% year over year. The sequential growth came from all target markets.
Headquartered in California, Supertex designs and sells high-voltage analog and mixed signal Integrated Circuits (IC) for the Medical Electronics, Imaging, Telecom, LED Lighting, and industrial/other markets.
Total LED driver sales, including general lighting applications, grew to $4.4 million compared to $3.9 million in the prior quarter.
The largest customer for Supertex continued to purchase large quantities of LED drivers for backlighting LCD TVs throughout the third quarter. This customer announced that sales of its LED TVs exceeded expectations and surpassed 2.6 million in 2009. Sales in 2010 are expected to exceed 10 million units for this customer. During the quarter, Supertex also shipped LED drivers to another Asian LED TV maker and management expects to add a third customer in the fourth quarter.
Sales of imaging products and EL inverters for cell phones grew 51% sequentially while telecommunications IC sales increased 31%. Sales of medical ultrasound products were slightly down and the demand for medical foundry service business declined by $1.1 million.
Gross margin came in at 48%, lower than management’s targeted goal due to lower net sales and lower capacity utilization in recent quarters compared to previous years. Earnings per share (EPS) came in at 22 cents compared to 15 cents in the previous quarter and 25 cents in the year-ago quarter, easily beating the Zacks Consensus Estimate of 14 cents.
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